Why do peope have such trouble saving money? It's pretty easy...

What if they only make 4 figures a year but have 5 figure expenses?

So you're saying you're single?

Solo wrote:

So you're saying you're single?

yeah, but not for long, didn't you read it?

Then they are in the wrong business or have spending out of control..

glxccc wrote:

Solo wrote:

So you're saying you're single?

yeah, but not for long, didn't you read it?

Lol this is gold

I know a lot of people on this board are younger, so as an older guy and a parent I feel compelled to comment.

Please, read this article:

http://www.mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement/

You can quibble a bit with the math, but the sentiment is dead-on.

If you save two-thirds of your income, you can work for 10 years and retire. If you save 50% of your income, you can work until you are about 40 and retire. If you can save 33% of your income, you can work until you are about 50 and retire.

That is clear math. So, say you want to retire at 50. Never let your expenses get higher than 67% of your income and put 33% away. You'll be able to retire at about 50 and keep the same lifestyle until you die.

Yes, you have to have your expenses totally in check, not get into debt, and invest wisely in index funds. Things that 90% of people seem to not be able to do. But it isn't that hard.

I can tell you that I am in my early 50's and have invested at least 30% of my income each year, lived well but always below my means, and I am in a position when I can retire whenever I choose to.

Yes, it helps if you have a higher income, but I'd say for any college graduate who can earn a decent living, there is no reason to ever have financial problems as long as you have a bit of discipline with your money.

Enjoyed the Mrmoneymustache article. The problem my wife and I are having is our insurance is through her work. If she retires early, we would be forced to buy insurance for both of us and our kids for a few more years. Presently, the majority of this insurance is paid by her employer. Yes, she could retire but a large percentage of our retirement income would go for insurance. Have to also think about dental and vision costs.

Typical smug response. Like the vast majority of the people on this board, and the 99% of smug people who make these "if I can do it, why can't the lazy poor do it" statements, you've been raised in a life of privilege and have never known what it's like to have food and shelter insecurity.

People making at or near minimum wage can't save 60% of their income, because they have to spend that much on housing alone:

http://static5.businessinsider.com/image/557867976da8118c3074389d-1120-898/screen%20shot%202015-06-10%20at%2012.35.51%20pm.png

For many, an apartment with cooking facilities is out of reach. The only places you can get without having enough capital to pay first and last month's rent plus security deposit are cheap hotels that don't have kitchens, and these consume so much of their income that saving for a deposit is out of reach. At $7.25 per hour, you're going to have a hard time saving thousands of dollars.

It's only when you can easily cover food, rent, and clothing that you can seriously consider savings.

ya..... wrote:

glxccc wrote:

yeah, but not for long, didn't you read it?

Lol this is gold

I don't get it.

People wouldn't mind working until they are 70 or older if they didn't torture themself trying to save all their $$$ from work. I want to visit the national parks when I'm fit, in my 20s, not when I'm older 50 and that 2/3 of whatever incomes can be allotted to it now. A good rule of thumb is if you're seeking a way out of the job you're in, you should allocate your resources to moving to a new position, not suffering through it.

Pretty Wise wrote:

Over the last six months I have saved over 60% of my net income, and I make, five figures thank you very much

60% of your net income is crap. That is like bragging about having the largest micro-P.

Hypothetical Example:

Gross Income $50,000

Cost of Living /Taxes $49,000

Net Income $1,000

Savings $600

Let us know when you are saving 60% of your AGI. Net Income is the last line on an income statement after a million deductions doofus.

Accounting Nazi wrote:

Pretty Wise wrote:

Over the last six months I have saved over 60% of my net income, and I make, five figures thank you very much

60% of your net income is crap. That is like bragging about having the largest micro-P.

Hypothetical Example:

Gross Income $50,000

Cost of Living /Taxes $49,000

Net Income $1,000

Savings $600

Let us know when you are saving 60% of your AGI. Net Income is the last line on an income statement after a million deductions doofus.

the OP doesn't know the difference of net vs gross vs AGi vs his dick. he is a kid. get married, have a few kids, then come back and brag how much you save.

and wow, you make 5 figures, is that like $12,000?

make 7, that's impressive.

Not everyone prioritizes saving money.

Some like to live well while they can.

Scrimping to retire at age 50 then spending the rest of your life living off of depleting savings while your calculate your remaining years of life doesn't sound too exciting.

Money is just changing numbers.

Eating, driving, traveling etc. is real value.

So, you get more value from spending than saving.

Or you are just deferring value from your youth to your old-aged-may-not-be-healthy-or-even-alive self.

Edward Teach wrote:

People wouldn't mind working until they are 70 or older if they didn't torture themself trying to save all their $$$ from work. I want to visit the national parks when I'm fit, in my 20s, not when I'm older 50 and that 2/3 of whatever incomes can be allotted to it now. A good rule of thumb is if you're seeking a way out of the job you're in, you should allocate your resources to moving to a new position, not suffering through it.

This is exactly correct. I don't understand the people who are desperate to retire as soon as they can. Go get a job/career that you enjoy and find fulfilling so that you can spend your life accomplishing something meaningful rather than being miserable all the time trying to retire.

Save enough to have a safety cushion, but don't give up on living now -- you might get hit by a bus tomorrow.

It should be pretty obvious that what applies to a single, childless guy without a home won't apply to others. Nonetheless, there are plenty of people who have no problem saving, especially if you consider retirement accounts and home equity -- which you should.

Here's roughly how we do it:

400 Gross

120 Taxes

10 Health Insurance

40 Retirement

230 Net

-60 mortgage and property tax

-40 various short-term loans

-25 child care and educational expenses (2 kids)

-10 upkeep of home

-20 travel

-50 other expenses

25 savings

So we save about 15% of our gross income, or 25% including home equity. And we spend fairly lavishly. Lots of room for improvement, obviously. But we are saving roughly 1/3 of our net income one way or another. Should be able to retire with 70% of our current income before our kids finish high school.

Easy credit policies make it enticing to go spend and 'pay' later. Fresh out of school, tons of loan debt, got a job making what seems like a great paycheck, and move in to a 'who's who of young people' apartment complex/high rise. Add to it, living it up every weekend at the hottest clubs in town, and the next thing you know... poof. Just like magic, it's gone.

Accounting Nazi wrote:

Pretty Wise wrote:

Over the last six months I have saved over 60% of my net income, and I make, five figures thank you very much

60% of your net income is crap. That is like bragging about having the largest micro-P.

Hypothetical Example:

Gross Income $50,000

Cost of Living /Taxes $49,000

Net Income $1,000

Savings $600

Let us know when you are saving 60% of your AGI. Net Income is the last line on an income statement after a million deductions doofus.

You can't possibly be that stupid, can you?

Or were you just trying to be funny and failing miserably?

Accounting Nazi wrote:

Pretty Wise wrote:

Over the last six months I have saved over 60% of my net income, and I make, five figures thank you very much

60% of your net income is crap. That is like bragging about having the largest micro-P.

Hypothetical Example:

Gross Income $50,000

Cost of Living /Taxes $49,000

Net Income $1,000

Savings $600

Let us know when you are saving 60% of your AGI. Net Income is the last line on an income statement after a million deductions doofus.

I have about 5000/month after taxes. I spend less than $2000 on literally everything else, so more than $3000 of my $5000 post tax income is put into savings/investments.

My mortgage is around $2000 per month (the total of your monthly expenses) but the value of my home has gone up over $500,000 from my original purchase 15 years ago. It sounds like I'm making only slightly more than you are.

I'm a homeowner so by not taking the standard deduction because I'm itemizing my mortgage interest and taxes on my home I'm able to save more on taxes.

There are many different ways to save.